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Saturday, December 19, 2009

Health Reform Secures 60 Votes in the Senate! Will the House Play Ball?

After weeks of false starts it appears that Senate Democrats have united behind a health reform bill - my read of Harry Reid's changes - the so-called Manager's Amendment - convinces me that this is a good bill and one that will substantially improve the American health care system. It is also, with minor exceptions, essentially the bill that Max Baucus reported from his Senate Finance Committee months ago. The key sticking points came down to federal funding for abortion and the creation of a so-called public option - both are gone. No federal funds will be used to cover or even subsidize insurance that covers abortion and states will have the option of excluding abortion coverage within the newly created health insurance exchanges. The Medicare expansion is gone as well, but the federal Office of Personnel Management will oversee a new national non-profit plan that people can buy in to.

Significant Elements:
  • Insurers in the large group market will be required to spend at least 85% of all premiums on medical care (that leaves 15% for administration, marketing, profit), in the small group market the standard will be 80%.
  • Individuals and families under 400% of the federal poverty line who receive employer-sponsored coverage and spend 8-9.8% of their income on premiums, could “convert their tax-free employer health subsidies into vouchers that they can use to choose a health insurance plan in the new health insurance exchanges. This would allow folks more choices in selecting coverage and force insurers to compete with the exchange.
  • Medicaid eligibility would be extended to everyone earning less than 133% of the federal poverty level and as a protection for states the federal government will pay for 100% of the cost until 2017 - typically a state pays nearly half the cost of Medicaid.
Why should Ben Nelson and Joe Lieberman - the hold outs who forced so many concessions - be celebrated and not derided?
  • Lieberman - Had it not been for Lieberman's efforts to strip away the public option the bill never would have received 60 votes. Lieberman has provided political cover for vulnerable Democrats like Mary Landrieu (D-LA) and Blanche Lincoln (D-AR) as well as dozens of House Democrats from conservative districts.
  • Nelson - The abortion concessions won by Nelson will also  provide coverage for House Blue Dogs, but Nelson's greatest contribution was his insistence that the full cost of the Medicaid expansion in Nebraska be covered by the federal government forever - while the expansion in all other states is covered for only 5 years. Seem unfair? Sen. Tom Harkin (D-IA) summed it up well "In 2017... when we have to start phasing back from 100 percent, ... they are going to say, 'Wait, there is one state that stays at 100?' And every governor in the country is going to say, 'Why doesn’t our state stay there?'" In other words, Nelson win for Nebraska is likely a win for every state.
According to the Congressional Budget Office, the new proposal would reduce the deficit by $132 billion over 10 years and by $1.3 trillion over 20 years and it would extend insurance to 31 million individuals, covering approximately 94% of legal residents by 2019. This bill is a step in the right direction. It deserves the support of conservatives and liberals alike. To those on the left who argue that it is better to have no bill at all than to accept a bill that limits abortion coverage and contains no public option - I urge you to get your priorities straight. This bill is about extending health insurance, not about imposing ideological rigidity. To those on the right who lament the lack of malpractice reform or the fact that you were essentially shut out of the process – get over it. This is a common sense bill that deserves bipartisan support.

If Harry Reid truly has the 60 votes necessary for cloture then the stage would be set for a vote by December 24th. After that it goes to conference committee where Nancy Pelosi will need to win major concessions from House liberals in order to avoid having this deal fall apart early in the new year. Of course, early word is that House Democrat conservatives may not be willing to accept the abortion compromise...